There is the need to demystify NNPC’s finances

For close to three months now, there has been a raging political storm in Nigeria brought about by allegations by the Governor of the Central Bank of Nigeria, Sanusi Lamido Sanusi that as much as $49.8billion of oil revenue was not remitted to the Federation Account by the Nigerian National Petroleum Corporation (NNPC) between 2009 and 2013.

Although the figure quoted by the apex banker has oscillated from $49billion to $12billion and then to $20billion, it goes without saying that indeed, there is something amiss going on at the government-owned oil company through whom the bulk of Nigeria’s earnings come through. All the explanations by the Group Managing Director of the NNPC, Andrew Yakubu that Sanusi does not understand the workings of the NNPC are not enough to swat away these weighty allegations; their claim that the monies were used for kerosene subsidies are also suspect considering that kerosene is sold at an unsubsidized price and late President Umaru Yar’adua is said to have issued a directive stopping kerosene subsidy in 2009.

For one, it is almost ten years since 2005 that there has been an audit of the accounts of the NNPC, which has been treated as a cash cow by many government officials. Throughout his tenure, former President Olusegun Obasanjo never had a Petroleum Minister and NNPC answered directly to him. It remains to be uncovered via an audit how its finances were handled in that period and ever since then.

There is no doubt that the way out of this scandal is to have an independent audit to be carried out within NNPC, an opinion expressed also by the Minister of Finance, Dr. Ngozi Okonjo-Iweala. The longer it takes to do this audit, the more this scandal worsens and becomes more politically-charged considering the nature of the political environment with elections only a year away.
The government should treat this as a matter of urgency, as its reputation is suffering already from the damage done to it by the scandal. It is bad enough that no action or statement from the government was taken on the issue until it was part of the open letter written to President Goodluck Jonathan by his former godfather and predecessor, Obasanjo. It should not have to wait until a political emergency spurs into action again.

But the action should not stop at trying to find out where the said missing revenue has gone to; this scandal buttresses the point that has been severally made that the NNPC is way overdue for unbundling, dismantling and put under private management. Other national oil companies such as Petronas of Malaysia and Petrobras of Brazil have grown to be players in other oil-producing countries around the world and are regularly ranked among the top companies in the world; NNPC continues to grapple with issues such as funding and accounting, as it seems to be perpetually in the red when it should be turning profits.

The unbundling of NNPC is one of the key components of the Petroleum Industry Bill that has been languishing at the National Assembly for the past six years with no hope of it being passed anytime soon, since it is not even on the radar for quite a long time. If anything, this should make the legislators to realize the urgency of the PIB and move to passing the bill; not only is Nigeria losing a lot in terms of investments going elsewhere since the investors are unsure of under what law their investments will exist, the NNPC continues to be a cesspit of corruption and a drain on the economy.
Unless the NNPC is dismantled and put under proper management, by privatization if possible, the current drama will likely be re-enacted at a future date. It has been proven innumerably that enterprises in government hands are hard to run efficiently. The thinking that if it can be done better by private hands, it should be given to them is truest in Nigeria.

The onus is now on government: both the executive and legislative arms to take urgent action on NNPC and demystify what has been a very opaque but very important organization, and to also overhaul it to give it the level of excellence it should have long attained.